Benchmarks trade lower in early deals

Indian equity benchmarks made gap-down opening on Friday, the last day of the Samvat 2076, amid weak global cues. Markets are trading lower with around half a percent cut in early deals, due to selling in Bankex, PSU and Telecom stocks. Weak macro-economic data dampen sentiments in domestic markets. Retail inflation soared to a 77-month high in October led by a surge in food prices. The inflation based on the Consumer Price Index (CPI) was 4.62 percent for the same period a year ago. on other hand, as per the Index of Industrial Production (IIP) data released by the government, India's index of industrial output for the month of September was at 0.2 percent versus -8 percent in August. Traders also remained concerned with report that India has reported 43,861 fresh Covid-19 cases in the past 24 hours. The total caseload now stands at 8,727,900. The country's death toll has mounted to 128,686. Meanwhile, the Reserve Bank of India said it will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for an aggregate amount of Rs 10,000 crore each on November 19. The decision was taken after a review of the current liquidity and financial conditions.

On the global front, most of the Asian markets were trading lower amid worries about rising coronavirus infections in the US as well as Europe and the economic impact of new restrictions and lockdowns. Japan too has recorded a surge in coronavirus cases nationwide, prompting the government to extend the restriction on spectator numbers at large events by another three months, instead of until the end of November as decided earlier.

Back home, fertilizer industry stocks were in focus after Finance Minister Nirmala Sitharaman announced a Rs 65,000-crore fertilizer subsidy for farmers as part of her stimulus package to boost the economy. In scrip specific development, Grasim Industries edged up marginally after it announced the sale of its fertilizers business to Indorama Corporation for Rs 2,649 crore. On the other hand, Tata Consultancy Services fell after it reportedly agreed to acquire Pramerica Technology Services from insurance giant Prudential Financial Inc.

The BSE Sensex is currently trading at 43105.84, down by 251.35 points or 0.58% after trading in a range of 43053.37 and 43298.92. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.07%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.82%, Energy up by 0.74%, Realty up by 0.68%, Consumer discretionary up by 0.43%, Healthcare up by 0.36% while, Bankex down by 1.75%, PSU down by 1.43%, Telecom down by 1.16%, Metal down by 0.77%, Utilities down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.97%, Bajaj Finance up by 1.34%, Reliance Industries up by 1.11%, Asian Paints up by 1.03% and Bajaj Finserv up by 0.63%. On the flip side, Indusind Bank down by 3.24%, SBI down by 2.40%, Axis Bank down by 2.21%, Larsen & Toubro down by 1.98% and HDFC down by 1.66% were the top losers.

Meanwhile, Moody's Investors Service has revised upwards its Gross domestic product (GDP) forecasts for India to (-) 8.9 percent contraction in the 2020 calendar year, from its an earlier projection of -9.6 percent contraction, as the economy reflates after a long and strict nationwide lockdown but said the recovery is patchy. It also revised upwards India's GDP forecast for calendar year 2021 to 8.6 percent growth from an earlier projection of 8.1 percent expansion. The Indian economy had grown by 4.8 percent in 2019.

According to the report, India's economy had the biggest contraction, 24 percent year-over-year in the second quarter (April-June), as a result of a long and strict nationwide lockdown. It also said the country had a 69-day nationwide lockdown, which was followed by local and state-level restrictions to contain the spread of the pandemic. It added that restrictions have eased only slowly and in phases, and localised restrictions in containment zones remain and as a result, the recovery has been patchy.

The report further said a steady decline in new and active cases coronavirus cases since September, if maintained, should enable further easing of restrictions. It said ‘we, therefore, forecast a gradual improvement in economic activity over the coming quarters’. However, it said slow credit intermediation will hamper the pace of recovery because of an already weakened financial sector.

The CNX Nifty is currently trading at 12628.55, down by 62.25 points or 0.49% after trading in a range of 12607.70 and 12661.95. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.67%, Titan Company up by 1.74%, Bajaj Finance up by 1.66%, Hero MotoCorp up by 1.27% and Reliance Industries up by 0.98%. On the flip side, Indusind Bank down by 3.22%, Tata Motors down by 2.41%, SBI down by 2.38%, Axis Bank down by 2.13% and Larsen & Toubro down by 2.13% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 fell 250.00 points or 0.98% to 25,270.88, Straits Times lost 11.62 points or 0.43% to 2,700.28, Hang Seng declined 144.17 points or 0.55% to 26,025.21, Jakarta Composite dropped 22.64 points or 0.41% to 5,435.96 and Shanghai Composite was down by 24.93 points or 0.75% to 3,313.75. On other hand, Taiwan Weighted gained 12.12 points or 0.09% to 13,233.90 and KOSPI rose 6.99 points or 0.28% to 2,482.61.